Here is a summary of some new laws passed by the California Legislature that may affect REALTORS® in 2019. You can view an even larger list on C.A.R.’s website and you can read the full text of each law here.

 


Civil Liability: Liability of real estate agents for sexual harassment expanded

Even if a business, service, or professional “relationship” does not presently exist, a real estate agent (and “investor” among other persons) may be liable for sexual harassment when he or she holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. This law eliminates the element that the plaintiff prove there is an inability by the plaintiff to easily terminate the relationship. (Senate Bill 224)


Common Interest Developments: Financial review on a monthly basis and other anti-fraud precautions 

This law requires HOA boards to review on a monthly basis the association’s accounts and reserves; requires fidelity bond coverage for directors, officers, and employees to be maintained equal to three months’ reserves; and requires a manager to obtain written board approval before they may transfer association funds of $10,000 or more. (Assembly Bill 2912)


Employment: Discrimination and harassment

Prohibits an employer from requiring the execution of a release or non-disparagement agreement in exchange for any condition of employment. Broadens the definition of harassment to include any type of harassment, not merely sexual, for which an employer may be responsible when committed by a nonemployee. Explains in detail the legal standards constituting sexual harassment by citing and affirming various court cases. (Senate Bill 1300)


Employment: Sexual harassment training requirements Expanded By January 1, 2020.

Employers who employ 5 or more employees, including temporary or seasonal employees, must provide at least 2 hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every 2 years thereafter. (Senate Bill 1343)


Financial Disclosures: Foreign language translations for loan modifications

This law requires financial institutions to provide specified mortgage loan modification documents in the same language as the negotiation if the terms of negotiation are conducted in Spanish, Chinese, Tagalog, Vietnamese, or Korean. Currently, these disclosures are required only when a loan is originated. The law is also updated to include the Loan Estimate and Closing Disclosure forms in addition to the Good Faith Estimate. (Senate Bill 1201)


Insurance: Fires and other natural disasters: Eight new laws to strengthen the rights of homeowners

With wildfires and other disasters devastating areas across the state, insurers have employed various tactics to avoid paying out on claims and to minimize their losses in the future. This set of eight new laws attempts to ensure that a homeowner who has purchased insurance will realize the benefits of their policy and will not be improperly or unfairly denied coverage presently or in the future.

(View links to all 8 laws on C.A.R.’s website)


Real Estate Law Clean-up: Updates the real estate law to make it clearer and conform it to existing practice.

This C.A.R. sponsored “clean-up” legislation updates the real estate law to conform it to existing practice, eliminates antiquated or confusing laws, clarifies existing law, and introduces plain language where appropriate.

Among the more important changes: This law reiterates that existing law permits agents and brokers to establish their working relationship as one of either independent contractor or employment: it consolidates real estate definitions across a range of laws; and it resolves a variety of specific issues caused by confusing and antiquated laws. (Assembly Bill 1289)


Real Estate Law Clean-up: Independent Contractor Relationship Reaffirmed: New Private Transfer Fees Outlawed

This C.A.R. sponsored law prohibits developers from creating new property covenants, conditions, or restrictions that force subsequent owners to pay specially designated fees every time the property is transferred, unless the fee provides a “direct benefit” to the property, as defined in federal law. (Assembly Bill 2884)


Sexual Harassment: Liability for real estate agents expanded

Even if a business, service, or professional “relationship” does not presently exist, a real estate agent (and “investor” among other persons) may be liable for sexual harassment when he or she holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. This law eliminates the element that the plaintiff must prove there is an inability by the plaintiff to easily terminate the relationship. (Senate Bill 224)